Inside Scoop: Twitter's stock skyrockets

7 November 2013

Transcript

-Hey, everyone.
Welcome to the Inside Scoop.
I'm CNET's Kara Tsuboi, joined by CNET senior reporter Daniel Terdiman.
Welcome, Daniel.
-Thank you.
-Big news in the social media world, Twitter went public this morning.
-Yes, they did.
Yup.
-Yeah, and their stock is doing pretty well.
-Yeah.
-It opened at, what, $45--
-$45, after being priced yesterday at $26.
So, that's quite a pop.
-I know you're not necessarily a financial analyst, but did those numbers surprise you?
Does it-- is it surprising anyone that it is so high right now?
-Well
I bet it surprises Twitter.
I mean, that's why they priced it at $26.
But I did see some reports in the last few days that suggested, you know, $35, $40 for the shares.
So, yeah, some people certainly were aware that it was gonna come out at that range.
-A lot of people couldn't help but compare Twitter's IPO to Facebook's IPO a year and a half ago.
-Sure.
-And with Facebook, you know, we saw them dip really low to half its initial value before climbing back up.
-Right.
-What do you think is different about Twitter?
Why are they seeing such success right out of the gate?
What did they learn from Facebook?
-Well, I think, first of all, they studied
Facebook's IPO and saw, you know, some of the problems.
One of the things, I think, is that Facebook put out too many shares, so it kind of diluted the value a little bit.
-Sure.
-Plus, I think, that there were just some fundamental problems with Facebook.
They hadn't figured out how to make money off of Mobile, whereas Twitter it really is a pure Mobile service and everybody knows that they-- you know, that's where the eyeballs are.
They say it's just on Mobile.
And I just suspect that, you know, they huddled with their bankers and kind of like figured out what the problems were.
They went with the New York Stock Exchange instead NASDAQ.
So, they really tried to do things very differently
than Facebook.
-Now, Twitter might have figured out the Mobile, but at the same time they never turned a profit.
-That's true.
-Not once in their--
-Right.
-70 years of existence.
-Right.
-That's gotta change now that you're public, right?
-Well, they certainly have to hope so.
-Yeah.
-You know, if you look at their numbers, their amount of revenue has certainly been going up and I think it's, you know, gonna be double this year than it was last year.
So, you know, the trend line is in the right direction.
Their costs are also going up at the same time.
-More hires.
Yeah.
-There is no guarantee they're ever gonna make money but I-- you know, I believe in Twitter.
I think that the advertisers seem to be, you know
signing up and believing in Twitter and, you know, there's a lot of room for them to grow.
But the one problem is that they've kind of saturated the market in the United States and most of their advertising revenue comes in the United States.
So if they don't figure out how to make money off of advertising internationally, that's where their big problem could be.
-How does this advertising, all this growth, how does that look for the average user?
What are we going to see different in our accounts?
-It's really hard to say.
I mean, you know, you start to those like promoted tweets and everything--
-Sure.
-show up.
You know, the big thing that Twitter's been doing is it's sort of
like the amplified program which is partnering with the TV networks and other-- you know, like ESPN and NFL, people who create video content, and so they're figuring out how to imbed video content into tweets.
And I think that's where we'll start more advertising.
It'll be-- you know, I think the advertising is gonna be, you know, prominent.
You know, like you wanna watch an NFL club, you'll have to go through an ad first.
And so, you know, the age of a tweet just being 140 characters and nothing more, I think that's long past.
-Wow.
Now, assuming Twitter closes today, you know, in that steady
mid 40s range, what do you think this is really going to mean for the landscape of social media sites and their public offerings in the future?
-Well, it's good.
You know, and if you're Pinterest or, you know, snapshots coming like that, you've gotta be, you know, likes-- chopping at the bear right now.
Also, Square is-- we know, Jack Dorsey's other company--
-Yeah.
-you know, they-- there was a Wall Street Journal story yesterday that said
Square is starting to think about an IPO for next year.
So, yeah, I mean, the market looks like-- you know, the stock market has a-- is doing very well right now.
Twitter having its stock price do so well, you know, it's gotta-- it's gotta look good.
-Right.
And all of us here at CNET we're gonna keep a close eye on this and people around the world too, Twitter followers especially.
-Absolutely.
-Thank you so much, Daniel Terdiman, senior reporter for CNET.
I'm Kara Stuboi.
Thanks for watching the Inside Scoop.